About that mysterious $40 billion ...

From msnbc.com's Tom Curry: “We agreed it’s 78... The number was 78…. There’s no question about the number... the number is 78. It was agreed upon last night.” So said Senate Majority Leader Harry Reid Friday afternoon at a press conference describing an agreement that he said he, President Obama, and House Speaker John Boehner had reached on Thursday night to cut spending for the remainder of this fiscal year.

Reid calls it a $78 billion cut.

But why do news stories use the figure $38 billion as the amount that the negotiators have agreed to cut?

The different numbers are simply the result of two different ways of measuring.

First of all, keep in mind we are now in the middle of fiscal year 2011, which began on Oct. 1, 2010.

The cuts being discussed would affect fiscal year 2011 spending.

Compared to what President Obama proposed way back in January of 2010 when he issued his fiscal year 2011 budget blueprint, the deal Reid is describing would spend $78 billion less.

But measured another way, the deal would amount to $38 billion being cut from current spending levels.

For many federal agencies, current spending levels are the same as in fiscal year 2010. That’s because since last September, the Congress has passed and Obama has signed into law a series of interim spending bills, which essentially keep spending at the same level it was at in fiscal year 2010.

But saying the cut amounts to $78 billion makes it appear to be bigger – and that presumably can help Reid make his case that Democrats are making big sacrifices by agreeing to painful cuts in spending.

Or as Sen. Patty Murray, D- Wash., said at Reid’s press conference, “Difficult as it has been, we have compromised and compromised, and we are at a number that some of us are going to have to swallow darn hard, knowing the consequences of that.”

So how big a cut is $38 billion?

It is relatively small in the grand scheme of things. Since projected federal spending this fiscal year will be about $3.7 trillion, according to the Congressional Budget Office, a cut of $38 billion would amount to a one percent reduction.

The government spends roughly $11 billion per day, so $38 billion would be less than four days’ worth of spending.

The number that some House Republicans campaigned on last year was $100 billion in spending cuts. Again that’s measuring against Obama’s fiscal year 2011 funding request and Democrats aren't the only ones to use the measure of the proposed Obama budget when convenient.

When the House Appropriations Committee OK’d its spending reduction bill in February – a bill later rejected by the Senate—committee chairman Rep. Hal Rogers, R- Ky., said, “This bill is a monumental accomplishment for each and every American who believes that their government is spending too much. It dramatically scales back the size and scope of domestic government programs (and) eliminates $100 billion in spending compared to what the President asked for last year.” The actual figure compared to actual 2010 spending levels is closer to the $61 billion commonly reported.